A Challenged Multifamily Owner is an Investor who is not able to manage the various aspects of apartment ownership, including deferred maintenance, property taxes, and mortgage notes. These challenges arise due to life situations, such as divorce, bankruptcy, and the bad tenants .
Often referred to as Distressed Landlords, the challenges they face can be quite stressful and, in some cases, one leads to another.
For Investors who cannot maintain the property with regular maintenance or major repairs, but still pay their mortgage note, the property will lose value the longer the property maintenance goes unaddressed. It is not uncommon with foreclosure that borrowers have deferred maintenance. Obtaining an equity line of credit or refinancing is not usually an option to resolve this challenge because either there is not enough equity to do so or the Investor as a borrower of credit cannot qualify.
Property taxes are another challenge. If the Investor is not paying their property taxes through their mortgage payments, when the bill comes in, it might be a financial strain to make the payment. Once property taxes become delinquent, the Tax Assessor can place a lien on the property. What’s even more distressing is that the Tax lien is placed in front of the mortgage lien. That means if the tax is not paid by the due date, the Tax Assessor can sell the property at auction. There is a redemption period for Tax Lien Sales, but the Investor will need to pay the full amount of the back taxes plus the value of the property to redeem it at any time within the redemption period.
One of the most common challenges for Investors is paying the mortgage note. Defaults of mortgage note payments result in foreclosure if an Investor does not work out curing the default with their lender. In addition, as these defaults increase over time, the Investor can end up being ‘upside down’ (owing more than what current fair market value). This results in a Short Sale, which is a long process. What’s worse is that offers to purchase Short Sale properties require lender approval, and they don’t always get approved.
If you are an Investor in Multifamily properties and this is your situation, I Can Help You!
Of course, the most ideal option is to keep your building, not have to sell, potentially find a resource to help with maintenance or taxes, and getting it cash-flowing again. That’s my goal. And I can educate you on options you may not be aware of to avoid foreclosure or get a fresh start without losing the shirt of your back!
If you are in Pre-Foreclosure and would like a free consultation to review your unique situation and the options available to you, Contact Me today to schedule a private meeting near your building.
There are solutions and I have them!